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Wire World

March 1, 2010
The wire and cable market's many quirks, rogues and marketing geniuses make it one of the most interesting product areas in the electrical wholesaling industry.

What is it about the wire and cable market that makes it so different from other product areas?

Part of it may be its mindshare with electrical distributors, as wire and cable accounts for approximately 15 percent of their total annual sales on average, according to EW's Market Planning Guide. If an electrical distributor is running a golf outing for his or her suppliers, their largest wire manufacturer would probably be in the first foursome.

But wire and cable gives electrical distributors plenty of headaches, too, as you can see in the wire aisle of any distributor's warehouse. This stuff requires big-ass material handling equipment to move around, and when customers don't want a whole reel of it, you have to figure out how to keep track of all the “shorts” that accumulate.

Don't get me started on all of the market's quirks. Numero Uno is the obsession with copper pricing. In what other product category can manufacturers, distributors and reps use an excuse for a price increase like, “Oh, the labor situation in Mexico at the mines has really deteriorated,” and the customer will just nod knowingly?

In what other market would a happily retired distributor still want one-touch access to real-time copper price information on the computer in his Palm Springs golf condo? Wire and cable.

And then there's the wire and cable market's collection of colorful characters. A medium-sized wire distributor who will remain nameless was dying to get featured in this magazine. This was in the early days of cell phones, and during lunch this guy hauled a cellphone the size of a World War II walkie-talkie to the table, and I am pretty sure staged a call just so I would know how important he was. He never got the feature article.

It's an insanely competitive market, too. Maybe it's the nature of the business, which for many wire and cable manufacturers or specialty distributors means surviving on high volume (in the economic times when that's available) at razor-thin margins. That's probably contributed to massive consolidation in the industry. One wire exec once told an EW reporter that when the big wire companies buy each other's wire lines, it's like rearranging the deck chairs on the Titanic.

Some of the infighting in the wire and cable market gets vicious. During some Internet research for this month's cover story, I learned that awhile back one wire distributor was trying to snuff out rumors reportedly planted by a competitors that one of his branches had been raided by the FBI.

But the market has more than its share of success stories, too, and many family business have survived in this market. Anixter is a tough competitor for electrical distributors, but this publicly owned $6.1 billion business was back in its earliest days a family-run business started up by brothers Alan and William Anixter in 1957.

Then there's the legendary Terry Hunt, who built and sold Houston Wire & Cable, and several years later got back into the electrical business in 1991 by starting up Futronix Corp. in an effort to build a national distributor of surplus electrical equipment. He had been featured already in two EW cover stories but loved publicity and wanted to make the cover again with Futronix. I visited Futronix one day in Houston, parking near the flagpole in the front lot flying the skull and crossbones of the Jolly Roger. Hunt greeted me in his office — which included the skins of several big-game animals including the first zebra-skin rug I had ever seen. During our conversations, he playfully threatened to have one of his managers keep me hostage in a car and drive me around one of Houston's many beltways until I agreed to feature him on the cover again.

But when you get right down to it, it's the cast of characters in the wire and cable market that give it its unique personality. For every rogue there's a savvy entrepreneur doing the right things right, and for every crackpot there's a marketing genius. They're all in it together, many if not most for their entire careers. One wire distributor summed it up best for me. “The wire and cable market is like Devil's Island (the infamous French penal colony),” he said. “You may change cells every once in a while, but you never leave.”